Airtel unveils Rs 3,000 cr payments bank plan

Sunil Mittal-led Bharti Airtel Ltd on Thursday unveiled itsplan for setting up a payments bank with an initial investment of Rs 3000 croreto build a nationwide network.

Airtel Payments Bank is the first among several such nichebanks to start operations after the RBI granted new permits to bring financialservices within the reach of millions who still lack access to formal banking.Payments banks can take deposits and remittances but are not allowed to lend.

This new set of banks is expected to increase competition inthe sector by offering higher interest rates on deposits. Several of Bharti'scompetitors have also received payments bank licenses, including RelianceIndustries, which has entered the country's telecoms sector through unit Jio,as well as Vodafone Group Plc and Idea Cellular.

Private-sector lender Kotak Mahindra Bank owns a minoritystake in Airtel Payments Bank. Airtel Payments Bank will use 250,000 of BhartiAirtel's retail mobile services outlets to offer its services and has alreadyadded one million customers during its pilot phase, it said in a statement.

 Inaugurating theinaugurated Airtel Payments Bank, Finance Minister Arun Jaitley said as moreand more telecom companies enter the fray, ``I think we will hopefully seecompetition not only amongst telecom companies which we read a lot about thesedays but we will probably see competition between conventional and the new modeof banking that you are going to introduce.''

 Bharti EnterprisesChairman Sunil Bharti Mittal said this is the first payments bank which will beopened across 29 states in India by leveraging retail partners of Airtel.